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Why Is International Trade and Investment so Important to Rhode Island?
• International trade – both exports and imports – supports 130,000 Rhode Island jobs. These trade-‐related jobs are at large and small companies, on farms, in factories, and at the headquarters of Rhode Island’s globally engaged firms. See Rhode Island Jobs Depend On Two-‐Way Trade.
• Rhode Island exports billions of dollars in goods and services annually, including scrap and recycled materials, metals, manufactured goods like jewelry, and travel-‐related services. The vast majority of Rhode Island exporters are small and medium-‐sized companies with less than 500 workers. See Rhode Island Businesses Grow With Exports.
• Customers in 159 countries around the world buy Rhode Island-‐grown and manufactured goods and services. Top markets like Canada, Turkey and Germany buy hundreds of millions of dollars of Rhode Island products and services annually. See Rhode Island Companies Export Throughout The World.
• Imports lower prices and increase choices for Rhode Island companies and families. Lower raw material and input costs help Rhode Island companies stay competitive in global markets, while families can stretch paychecks further as trade agreements reduce the cost of products by eliminating costly barriers to trade. See Rhode Island Companies And Workers Use Imports To Compete.
• Free trade agreements (FTAs) have led to rapid export growth to partner countries. America’s FTA partners purchased 10.5 times more goods per capita from Rhode Island than non-‐FTA countries did in 2012. See Rhode Island Needs Trade Agreements To Grow.
• Foreign-‐owned companies invest in Rhode Island and employ 26,000 Rhode Islanders. See Foreign Investment In Rhode Island Creates Jobs.
HOW RHODE ISLAND’S ECONOMY BENEFITS FROM INTERNATIONAL TRADE AND INVESTMENT
With more than 95 percent of the world’s population and 80 percent of the world’s purchasing power outside the United States, future economic growth and jobs for Rhode Island and America increasingly depend on expanding U.S. trade and investment opportunities in the global marketplace. The following pages feature key facts and figures drawn from new Business Roundtable research and U.S. government data that help explain the benefits of international trade and investment and the importance of active trade and investment initiatives to U.S. economic growth and jobs, including in Rhode Island.
Contact: David Thomas, Business Roundtable, 202.496.3262, [email protected]
www.brt.org/trade
RHODE ISLAND JOBS DEPEND ON TWO-‐WAY TRADE
Trade creates and supports jobs in Rhode Island. Export growth increases jobs by generating new business for Rhode Island’s manufacturers, service providers and farmers. Imports support jobs and keep costs low, helping Rhode Island businesses compete and saving Rhode Island families real dollars at the cash register. Foreign investment in Rhode Island creates good jobs across a range of sectors.
Today, 130,000 jobs in Rhode Island depend on trade.
9.3%
22.2%
1992 2011
Share of Rhode Island Jobs Tied to Trade More than Doubled from
1992 to 2011
Top Sectors for Rhode Island Jobs Tied to Trade, 2011
Consumer Services 25,900 Prof., Sci. & Tech. Services 21,900 Wholesale & Retail Trade 16,600 Construction 7,600 Finance & Insurance 6,800 Manufacturing 5,000
More than one in five Rhode Island jobs depend on international trade.
• Rhode Island’s trade-‐related employment grew 15 percent, while total jobs decreased, from 2004 to 2011.
• Jobs in U.S. exporting plants pay on average up to 18 percent more than similar jobs in non-‐exporting plants.
• U.S. exporting plants increase employment 2 to 4 percent faster annually than plants that do not export. Exporting plants also are less likely to go out of business.
Small and Large Employers Partner to Export
In addition to exporting directly themselves, more than 6,000 American small-‐ and medium-‐sized enterprises (SMEs) export indirectly when they sell goods and services to large U.S. companies that export. SMEs account for nearly a quarter of the value of purchases by large companies, which in turn often export finished goods and services to customers around the world.
Creating and preserving quality U.S. jobs is a goal shared by all Americans. With more than 95 percent of the world’s population and 80 percent of the world’s purchasing power outside of the United States, future American economic growth and job creation depend on open markets abroad.
Contact: David Thomas, Business Roundtable, 202.496.3262, [email protected]
www.brt.org/trade
RHODE ISLAND BUSINESSES GROW WITH EXPORTS
Rhode Island ranked 48th in the United States in goods exports in 2012, with an estimated value of $2.4 billion, and 41st in services exports, with an estimated value of $1.7 billion in 2011. Large companies account for 37 percent of the value of Rhode Island’s merchandise exports, with the rest provided by small-‐ and medium-‐sized enterprises (SMEs).
Top Goods Exports, 2012 • Scrap & Recycled Materials: $641 million • Nonferrous (exc Alum) Metals: $230 million • Misc. Manufactured Goods: $166 million • General Purpose Machinery: $152 million • Basic Chemicals: $135 million Top Services Exports, 2011 • Travel: $504 million • Film & Television Distribution: $205 million • Education: $191 million
Leading Export Products Scrap and recycled materials was Rhode Island’s leading export category in 2012, accounting for 27.2 percent of total merchandise exports.
• Rhode Island ranks among the top 25 state exporters in nine industries, including tenth in scrap and recycled materials ($641 million), 12th in fibers, yarns and threads ($3.7 million), 13th in fish and other marine products ($26 million), 19th in nonferrous (exc alum) metals ($230 million), and 21st in ships and boats ($23.9 million).
• While Rhode Island is America’s 41st largest exporter of services, it ranks among the top five exporters of film and television distribution services.
• One of Rhode Island’s fastest growing exports is general purpose machinery, which have increased by 14 percent per year since 2002. In 2012, exports of these products reached $152 million.
1,374
138
No. of SME Exporters
No. of Large Company Exporters
91 Percent of Rhode Island Exporters Are Small-‐ or Medium-‐
Sized Companies
Contact: David Thomas, Business Roundtable, 202.496.3262, [email protected]
www.brt.org/trade
• Rhode Island’s top export market for goods and services is Canada. Other leading markets include Turkey and Germany.
• Among Rhode Island’s top export markets for goods, Turkey has grown the fastest at 75 percent per year since 2002. Exports to Costa Rica grew by 57 percent per year, while exports to the Dominican Republic grew by 48 percent per year.
• Rhode Island’s goods exports have grown three times faster than state GDP since 2002. The average annual export growth during this period was 9.4 percent, while the average annual state GDP growth was 3.1 percent.
• Goods exports accounted for 4.6 percent of Rhode Island’s state GDP in 2011.
RHODE ISLAND COMPANIES EXPORT THROUGHOUT THE WORLD
CANADA Merchandise Exports: $564 million
Services Exports: $178 million
TURKEY Merchandise Exports: $198 million Services Exports: data not avail.
GERMANY Merchandise Exports: $191 million Services Exports: $67.0 million
In 2012, Rhode Island companies sold their products in 159 international markets.
Top Export Markets*
ITALY Merchandise Exports: $132 million Services Exports: $26.2 million
UNITED KINGDOM Merchandise Exports: $93.4 million
Services Exports: $156 million
MEXICO Merchandise Exports: $150 million Services Exports: $55.5 million
Contact: David Thomas, Business Roundtable, 202.496.3262, [email protected]
www.brt.org/trade
*Goods data are for 2012; services data are for 2011
RHODE ISLAND COMPANIES AND WORKERS USE IMPORTS TO COMPETE
Imports frequently contain components (like cotton or semiconductors) and services inputs (like design) provided by U.S. companies and farmers, including companies and farmers in Rhode Island.
1,366 Rhode Island companies imported products in 2010.
Services, especially transportation from Rhode Island’s ports, finance and insurance, marketing and legal services are needed to bring imported goods to American manufacturers and households.
In 2010, nearly 64 percent of identified importers were very small businesses with less than 20 employees.
Imports Help Lower Prices (2002-‐2012)
Price Change Televisions -‐86.5% Personal Computers -‐74.9% Toys -‐42.8% Furniture & Bedding -‐7.1%
Trade and investment liberalization policies save the average Rhode Island family of four more than $10,000 per year. Imports help keep prices down for Rhode Island families while increasing their choices for goods and services. Prices for imported consumer goods tend to drop year after year.
PRICES
CHOICES OF GOODS & SERVICES
In 2012, 61 percent of the products imported into the United States were inputs and components used by American producers. Lower cost inputs keep U.S. manufacturing competitive in international markets.
$1.3 trillion of U.S. imported goods in 2012 were inputs or
materials used by U.S. producers.
Contact: David Thomas, Business Roundtable, 202.496.3262, [email protected]
www.brt.org/trade
RHODE ISLAND NEEDS TRADE AGREEMENTS TO GROW
The United States has some of the lowest trade barriers in the world. Overall U.S. trade with free trade agreement (FTA) partner countries supports 17.7 million American jobs. Trade agreements level the playing field by lowering other nations’ trade barriers, opening up foreign markets to U.S. exports and setting strong, enforceable rules for trade between the United States and those other countries. Rhode Island has increased its exports to FTA partner countries following implementation of the U.S. FTAs with those countries.
Since 2002, Rhode Island’s goods exports to FTA partners in effect in 2012 have increased by 65 percent. In 2012, $984 million of Rhode Island’s merchandise exports, or 42 percent, went to FTA partners.
• Rhode Island’s exports to Canada and Mexico have increased by $385 million (117 percent) since NAFTA went into effect in 1994. Exports to Canada have increased $266 million (89 percent), while exports to Mexico have increased $119 million (383 percent).
• Rhode Island’s exports to Guatemala have experienced strong growth, increasing by 770 percent since DR-‐CAFTA took effect for Guetamala in 2006.
• Rhode Island’s exports to Costa Rica of medical equipment have increased ninefold to $4.0 million since 2009 when DR-‐CAFTA went into effect for Costa Rica.
• Singapore bought 30 percent of Rhode Island’s basic chemical exports in 2012. Overall, FTA partners accounted for 57 percent of those exports from Rhode Island.
• The Trans-‐Pacific Partnership (TPP) countries that are not current FTA partners — Brunei, Malaysia, New Zealand and Vietnam — were Rhode Island’s 14th largest export market in 2011 with a combined value of $44.3 million.
FTA partners purchased 10.5 times more goods per capita from Rhode Island than non-‐FTA partners in 2012.
$2.32
$0.22
FTA Partner Countries*
Non-‐FTA Countries
Per Capita Purchases of Rhode Island Goods, 2012
*U.S. FTAs in effect with countries in 2012.
Contact: David Thomas, Business Roundtable, 202.496.3262, [email protected]
www.brt.org/trade
15,200
4,300
4,200
1,600
700
Other
Manufacturing
Retail Trade
Wholesale Trade
Informajon
Foreign-‐Owned Companies Employ a Total of 26,000 Rhode Island Workers Across Many Industries
FOREIGN INVESTMENT IN RHODE ISLAND CREATES JOBS
Foreign-‐owned companies invest significant amounts of capital to open or expand facilities in Rhode Island every year. Foreign-‐owned companies from around the world employ tens of thousands of workers in Rhode Island, including:
• 9,300 by companies based in the United Kingdom
• 4,100 by companies based in France
• 1,200 by companies based in Japan
• 1,100 by companies based in Switzerland
• 1,000 by companies based in Germany
Selected Foreign-‐Owned Companies Employing Workers in Rhode Island
Company Industry Country Ammaraal Beltech Conveyer Belt Manufacturing Netherlands AudioGO Broadcasting/Audio Book Publishing United Kingdom Barker Steel LLC Steel Product Manufacturing Canada Citizens Bank Financial Services Scotland Clariant Corporation Chemicals Manufacturing Switzerland GTECH Gaming Services Italy Hexagon Metrology Measuring Instrument Manufacturing Sweden Swarovski U.S. Limited Crystal Manufacturing Austria Toray Plastics America Plastics Manufacturing Japan Umicore USA Inc. Metal Manufacturing Belgium Unetixs Vascular Inc. Medical Device Manufacturing India Xstrata Recycling Inc. Recycling Services Switzerland
Contact: David Thomas, Business Roundtable, 202.496.3262, [email protected]
www.brt.org/trade
DATA SOURCES
RHODE ISLAND JOBS DEPEND ON TWO-‐WAY TRADE Jobs-‐Tied-‐to-‐Trade: Baughman and Francois, “Trade and American Jobs, The Impact of Trade on U.S. and State-‐Level
Employment: An Update” (2010) (http://businessroundtable.org/uploads/studies-‐reports/downloads/Trade_and_American_Jobs.pdf) as further updated by Business Roundtable, “How the U.S. Economy Benefits from International Trade and Investment”
Exporting Firm Wages: Riker, “Do Jobs in Export Industries Still Pay More? And Why?” (2010) (http://www.trade.gov/mas/ian/build/groups/public/.../tg_ian_003208.pdf)
Exporting Firm Growth: Bernard and Jensen, “Exporting and Productivity in the U.S.” (2004) (http://mba.tuck.dartmouth.edu/pages/faculty/andrew.bernard/exprod.pdf)
Small and Large Firms Partnering to Export: Slaughter, “American Companies and Global Supply Networks” (2013) (http://businessroundtable.org/uploads/studies-‐reports/downloads/BRT-‐SlaughterPaper-‐singles-‐Dec21.pdf)
RHODE ISLAND BUSINESSES GROW WITH EXPORTS Exports, Rankings, and Trends: The Trade Partnership, derived from U.S. Census Bureau (“Census”) data
(http://www.tradepartnership.com/site/data.html) Exporting Company Information: Census, “A Profile of U.S. Importing and Exporting Companies, 2009 – 2010”
(http://www.census.gov/foreign-‐trade/Press-‐Release/edb/2010/index.html) RHODE ISLAND COMPANIES EXPORT THROUGHOUT THE WORLD Exports, Rankings, and Trends: The Trade Partnership (http://www.tradepartnership.com/site/data.html) Export vs. GDP Growth: Derived from Census export data and U.S. Bureau of Economic Analysis (BEA) “GDP by State”
database (http://bea.gov/regional/index.htm) RHODE ISLAND COMPANIES AND WORKERS USE IMPORTS TO COMPETE Importing Company Information: Census, “A Profile of U.S. Importing and Exporting Companies, 2009 – 2010”
(http://www.census.gov/foreign-‐trade/Press-‐Release/edb/2010/index.html) Imports as Components: Derived from Census end-‐use import data Savings from Liberalization: Bradford, Grieco, and Hufbauer, “The Payoff to America from Global Integration” (2005)
(http://www.piie.com/publications/papers/2iie3802.pdf) Price Changes: Derived from BLS Consumer Price Index database (http://www.bls.gov/cpi/) RHODE ISLAND NEEDS TRADE AGREEMENTS TO GROW Exports and Trends: The Trade Partnership (http://www.tradepartnership.com/site/data.html) Per Capita Purchases of Rhode Island Goods: Derived from The Trade Partnership
(http://www.tradepartnership.com/site/data.html) and World Bank population estimates Jobs-‐Tied-‐to-‐FTAs: U.S. Chamber of Commerce, “Opening Markets, Creating Jobs: Estimated U.S. Employment Effects of
Trade with FTA Partners” (2010) (http://tradepartnership.com/pdf_files/US%20Chamber%20-‐%20Opening%20Markets,%20Creating%20Jobs%20study.pdf)
FOREIGN INVESTMENT IN RHODE ISLAND CREATES JOBS Employment Data: BEA “Direct Investment & Multinational Companies” database
(http://bea.gov/iTable/index_MNC.cfm) Foreign Investors: Uniworld BP database of “Foreign Firms Operating in the United States”
(http://www.uniworldbp.com)
Contact: David Thomas, Business Roundtable, 202.496.3262, [email protected]
www.brt.org/trade